SKY Network Television Limited's (NZSE:SKT) Has Found A Path To Profitability

By
Simply Wall St
Published
March 28, 2021
NZSE:SKT

We feel now is a pretty good time to analyse SKY Network Television Limited's (NZSE:SKT) business as it appears the company may be on the cusp of a considerable accomplishment. SKY Network Television Limited, an entertainment company, provides sport and entertainment media services in New Zealand and internationally. The NZ$309m market-cap company’s loss lessened since it announced a NZ$157m loss in the full financial year, compared to the latest trailing-twelve-month loss of NZ$129m, as it approaches breakeven. As path to profitability is the topic on SKY Network Television's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for SKY Network Television

SKY Network Television is bordering on breakeven, according to the 6 New Zealander Media analysts. They expect the company to post a final loss in 2020, before turning a profit of NZ$44m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 19% is expected, which is relatively reasonable. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.

earnings-per-share-growth
NZSE:SKT Earnings Per Share Growth March 29th 2021

Given this is a high-level overview, we won’t go into details of SKY Network Television's upcoming projects, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on SKY Network Television, so if you are interested in understanding the company at a deeper level, take a look at SKY Network Television's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Valuation: What is SKY Network Television worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether SKY Network Television is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SKY Network Television’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Promoted
If you’re looking to trade SKY Network Television, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.